POLICIES & PROCEDURES

Transcription

1 February 2014 POLICIES & PROCEDURES SINGLE-FAMILY HOMEOWNER REHABILITATION STANDARDS & SPECIFICATIONS

2 Table of Contents INTRODUCTION... 3 Borrower Eligibility Requirements... 4 Homeowner Requirements... 5 Age Qualification... 5 U.S. Citizenship Qualification... 5 Conflict of Interest Qualification... 6 Occupancy... 6 Cash Contribution... 6 Mortgage Status... 6 Property and Ownership Type... 6 Property Standards... 7 Mandatory Residential Construction Codes... 7 Administration and Enforcement of the State Minimum Standard Codes... 8 Visitability... 9 Energy Audits Lead Hazard Reduction Lead-Based Paint Hazards After Rehabilitation Value Environmental Clearance Georgia Security and Immigration Compliance Act Application In-take Process Loan Terms and Conditions and Minimum/Maximum Subsidy Transfer of Loan Recapture Provisions Temporary Relocation Work Write-Ups Bidding Procedures Eligible Contractor Requirements Contractor and Homeowner Negotiations INELIGIBLE CONTRACTOR REQUIREMENTS Applicants and Contractors Terms and Conditions Appeals and Disputes Project Closeout Record Retention Section 3 Outreach Plan and Policy Compliance COMMUNITY HOME INVESTMENT PROGRAM (CHIP) P a g e 2

3 INTRODUCTION State Recipients and Subrecipients administering CHIP resources are required to comply with the HOME regulations at 24 CFR Part 92, the CHIP Program Description, and the DCA Administrative Manual. The Policy & Procedures/Written Rehabilitation Standards and Specifications do not negate the need for securing your attorney s opinion and approval. The HOME program regulations are located at 24 CFR Part 92 and can be accessed at: CHIP funds may be used to assist existing low income homeowners with the repair, rehabilitation or reconstruction of their homes. Whenever CHIP funds are used for rehabilitation, the work must be performed according to the DCA s Written Rehabilitation Standards and Specifications which describe the methods and materials (which address health and safety, habitability and functionality, useful life of major systems, lead-based paint, accessibility, disaster mitigation, and other improvements), work write-ups and cost estimates, property inspections procedures, frequency of inspections; and payment schedule. At a minimum, when performing rehabilitation, the unit must be brought up to state and local codes and must pass an inspection that addresses all of the inspectable items under HUD s Uniform Physical Condition Standards (UPCS). State Recipients or Subrecipients will be required to adopt and submit as an addendum to DCA s Written Rehabilitation Standards the local codes applicable to their locality. Useful life of major systems Must estimate the remaining useful life of major systems based on age and current condition of the systems and determine the necessary annual replacement reserve contributions to facilitate system replacement at the appropriate time. All Homeowner Rehabilitation Assistance Activities, including Reconstruction, will be classified as a Rehabilitation activity Because units being rehabilitated must be brought up to state and local codes, Applicants may not undertake any form of special purpose homeowner repair program such as: weatherization programs, emergency repair programs, or handicapped accessibility programs. All of these types of repairs are eligible if they are undertaken within a more comprehensive scope of work that brings the unit up to state and local codes. A State Recipient or Subrecipient that has been awarded CHIP funds for homeowner rehabilitation has already established the basic program design. The basic program design was set forth in the CHIP application and approved by DCA through the issuance of a Statement of Award with General and Special Conditions. Implementation of the program must be in keeping with the approved CHIP award in all General and Special COMMUNITY HOME INVESTMENT PROGRAM (CHIP) P a g e 3

4 Conditions; the HOME Program Regulations; and all DCA CHIP policy memorandums and clarifications. DCA may modify or update the Policy and Procedures periodically at its sole and absolute discretion or as required by changes to federal regulations. State Recipients and Subrecipients are responsible for maintaining knowledge of these changes and implementing the most up-to-date requirements established for the program. The State Recipient or Subrecipient will act as the lender for all loans entered into by the State Recipient or Subrecipient. Each State Recipient or Subrecipient will assume all responsibilities that a conventional lender normally undertakes when processing a home rehabilitation loan application. All loans will be made to the benefit of the Georgia Housing and Finance Authority. The specific fair lending and credit laws that must be followed are covered in the Administrative Manual. The State Recipient or Subrecipient must also review the entire project and financial interface requirements with DCA as outlined in the CHIP Administrative Manual in order to be prepared to set up projects, draw down funds, and meet established reporting requirements. All construction hard costs, except those associated with the identification mitigation, abatement, or clearance of lead based paint issues, will be made available to the homeowner as a 0% deferred payment second mortgage loan payable only when the home is sold, refinanced, or no longer used for their principal residence per the Recapture Requirements for Homeowner Rehabilitation Activities. The term of the second mortgage loan will equal the Period of Affordability established for the assistance amount to the homeowner. All costs associated with the identification, mitigation, abatement or clearance of leadbased paint will be made available to the homeowner as a grant. All funds made available for project delivery costs of the activity will be made as a grant to the homeowner and paid to the State Recipient or Sub-recipient on behalf of the homeowner. Borrower Eligibility Requirements To be eligible, borrowers must meet program income, property, ownership/occupancy, and other requirements including paid property taxes, homeowner insurance and clear and acceptable forms of title. The program will serve homeowners with incomes at or below 80% of the area medium, adjusted for household size. The current income limits published by HUD can be found by visiting the HUD website located here: COMMUNITY HOME INVESTMENT PROGRAM (CHIP) P a g e 4

5 Methods for determination of annual income will be consistent with HUD requirements under 24CFR All income and assets must be documented by either a review of documents or third party verification. The requirement for third party verification of income and assets should be clearly set forth as well as the requirement that income is projected for the coming twelve month period from time of verification. All income and asset verification documentation must be current to within six (6) months of the CHIP loan closing. Units and Area Serviced The State Recipient or Subrecipient has outlined the number of units to be rehabilitated in their application. Units assisted by the CHIP Housing Rehabilitation Program must be located within the specific target area as outlined in the State Recipient s or Subrecipient s application. Homeowner Requirements A CHIP homeowner rehabilitation loan is made in the form of a deferred payment loan at zero percent interest and payable only in the event the household sells, transfers title or fails to occupy the property as their principal residence during the affordability period. Any other State Recipient or Subrecipient qualification requirements are clearly addressed in the CHIP application. State Recipient and Subrecipient must verify property ownership, status of any current mortgage, taxes and insurance. Only the HUD HOME allowed forms of ownership (fee simple title or 99 year leasehold) is acceptable. Life estates or contracts for deed or contracts for sale are not a HUD HOME approved form of ownership. Age Qualification Where applicable, and based on the age qualification as set forth in the program design of the DCA approved 2013 CHIP application, a borrower must have at least one full-time, permanent resident that is 62 years or older at the time of application. Verification of age and residence will be obtained by driver s license or state-issued identification card; or by review of income tax statements, social security statement, retirement benefits statement, or bank statement mailed to borrower s address; or other similar documentation demonstrating that the property is the borrower s primary residence. U.S. Citizenship Qualification Each member of a household that receives assistance must be lawfully within the United States. Each household member over the age of 18 years must complete a Declaration of Citizenship Status form. The parent/guardian must complete a Declaration of Citizenship Status form for each minor child under the age of 18 years. Evidence of citizenship status for all household members must be in the file. COMMUNITY HOME INVESTMENT PROGRAM (CHIP) P a g e 5

6 Conflict of Interest Qualification The Borrower must sign a document stating that they have no relationship to anyone who has a decision-making role or inside knowledge of the HOME process, financial or contractual interests in a HOME activity, or anyone who can obtain benefits of any kind from a HOME activity. This extends to anyone with whom a person has familial or business ties during the funding process and up to one year thereafter. If an individual knowingly has any of the aforementioned connections to a HOME activity, and has not made these ties public, then she/he has violated Federal Conflict-of-Interest statutes. Occupancy A Borrower must own and occupy the property to be improved as their principal residence. Occupancy will be determined by review of income tax statements showing borrower s address as the property to be improved, property tax bills mailed to the owner at the property address, utility bills addressed to the property address in the name of the borrower, bank statements addressed to property in the name of the borrower, or other similar documentation demonstrating that the property is the borrower s primary residence. Cash Contribution All Homeowner Rehabilitation Activities using CHIP funds must not require any contribution for eligible project costs from an eligible homeowner with an income as adjusted for household size shown below: Mortgage Status Household Size Income Limit Below Which No Owner Contribution Can Be Required 1 $15,610 2 $17,840 3 $20,070 4 $22,300 5 $24,530 6 $26,760 7 $28, $31,220 To be eligible for assistance, the borrower must demonstrate that all payments for mortgage(s) or loans secured by the property are current and up to date. This will be verified by a statement from the mortgage servicer(s). PROPERTY ELIGIBILITY REQUIREMENTS Property and Ownership Type COMMUNITY HOME INVESTMENT PROGRAM (CHIP) P a g e 6

7 To be eligible for CHIP homeowner rehabilitation assistance, in addition to the borrower s eligibility requirements listed above, the property must meet one of the four eligible property types listed below. 1. A traditional single-family structure (one unit, stick-built or modular) that is owned in fee simple. This property may contain one to four dwelling units. 2. A condominium unit (stick-built or modular) 3. A cooperative unit or unit in a mutual housing project; and 4. Manufactured housing that is: On land owned by the homeowner or having a lease in the name of the homeowner extending beyond the required Period of Affordability and On a permanent foundation Note: If CHIP funds are used to assist a homeowner in a two to four-unit property, the State Recipient or Sub-recipient must contact DCA for guidance in calculating the eligible amount of assistance that may be provided and the additional federal requirements that will be set forth as result of the building type. To be eligible for assistance, property tax payments must be up to-date for the property to be improved. A printed copy of the tax record indicating the status of property tax payments for the property to be improved will be placed in the file as documentation. Properties to be assisted must be insured and list the county/city and the Georgia Housing and Finance Authority (GHFA) as a loss payee on the policy prior to loan closing. Written notification from the insurance company will be placed in the project file to demonstrate compliance. In addition, property insurance must be maintained throughout the term of the CHIP loan. Upon any notification of policy cancellation, the county/city may purchase insurance for the property and charge the property owner for the cost of the insurance. Property Standards CHIP funded properties must meet certain property standards. At minimum, all units must meet HUD s Uniform Physical Condition Standards (UPCS). However, the HOME regulation also requires that all housing that is rehabilitated or financed with HOME funds must meet all applicable local codes (including state codes), rehabilitation standards, ordinances, and zoning ordinances at the time of project completion. Mandatory Residential Construction Codes The State of Georgia has mandatory residential construction codes that are applicable to CHIP and that must be adhered to regardless of whether or not the local government COMMUNITY HOME INVESTMENT PROGRAM (CHIP) P a g e 7

8 enforces the codes. There are no exceptions to meeting these requirements for construction of CHIP assisted homes. These mandatory codes are as follows (the latest edition as adopted and amended by DCA): Georgia State Minimum Standard Building Code (International Building Code) Georgia State Minimum Standard One- and Two Family Dwelling Code (International Residential Code for One- and Two-Family Dwellings) Georgia State Minimum Standard Fire Code (International Fire Code) Georgia State Minimum Standard Plumbing Code (International Plumbing Code) Georgia State Minimum Standard Mechanical Code (International Mechanical Code) Georgia State Minimum Standard Gas Code (International Fuel Gas Code) Georgia State Minimum Standard Electrical Code (National Electrical Code) Georgia State Minimum Standard Energy Code (International Energy Conservation Code) The permissive codes are as follows (the latest edition as adopted and amended by DCA): International Property Maintenance Code International Existing Building Code Residential Green Building Standard International Swimming Pool and Spa Code As noted above, the building, one and two family dwelling, fire, plumbing, mechanical, gas, electrical and energy codes are mandatory codes, meaning that under Georgia law, any structure built in Georgia must comply with these codes whether or not the local government chooses to locally enforce these codes. Administration and Enforcement of the State Minimum Standard Codes In order to properly administer and enforce the state minimum standard codes, local governments must adopt reasonable administrative provisions. The power to adopt these administrative procedures is set forth in O.C.G.A. Section (a)(1). These provisions should include procedural requirements for the enforcement of the codes, provisions for hearings, provisions for appeals from decisions of local inspectors, and any other procedures necessary for the proper local administration and enforcement of the state minimum standard codes. These powers include: Inspecting buildings and other structures to ensure compliance with the code; Employing inspectors and other personnel necessary for the proper enforcement of codes; COMMUNITY HOME INVESTMENT PROGRAM (CHIP) P a g e 8

9 Requiring permits and to establishment charges for said permits; and Contracting with other local governments for code enforcement. DCA periodically reviews, amends and/or updates the state minimum standard codes. If a local government chooses to locally enforce any of these codes, it must enforce the latest editions and the amendments adopted by DCA. DCA has developed a sample resolution/ordinance that may be used as a guide for local governments in the development of their administrative procedures. Please contact DCA for a copy of this sample resolution/ordinance and for any technical assistance needed in the development of a local code enforcement program. Appendices It should be noted that The Uniform Codes Act states that the appendices of the codes are not enforceable unless referenced in the body of the code, adopted by DCA, or specifically adopted by a municipality or county. If any appendices have been adopted by DCA, they will be noted in the Georgia amendments to the base code. Georgia Amendments to all of the codes listed can be found at: Please contact the Construction Codes and Industrialized Buildings Section for more information concerning these amendments. GENERAL PROPERTY IMPROVEMENTS General Property Improvements (GPI) outside the scope of bringing a unit to the state and local standards are generally not permitted unless the purpose of the improvement is to increase efficiency or handicapped accessibility of the unit. The costs of weatherization and handicapped accessibility improvements may not exceed $15,000 or more than 50% of the total cost of rehabilitation work. Homeowners who requests GPI s can do so as long as they pay for the GPI s with their funds. GPI s will not be a part of the rehabilitation contract or change orders. The homeowner and contractor must handle GPI s separate from the contract. Neither the Housing Specialist nor the State Recipient or Subrecipient will be a part of GPI s. Visitability State Recipients and Subrecipients who received points under this category must adhere to the completion of visitability improvements identified in O.C.G.A within all units receiving CHIP assistance to the extent compatible with the rehabilitation work. (i.e. if code related improvement affect an entrance to the property, bathroom door or other applicable item, the improvement will incorporate work necessary to meet visitability requirements). State Recipients and Subrecipient will document why any COMMUNITY HOME INVESTMENT PROGRAM (CHIP) P a g e 9

10 visitability improvements required by this law were not incorporated into the assisted improvements for each home. All units that will be reconstructed must be re-built to conform with the requirements of O.C.G.A Energy Audits State Recipients and Subrecipients who received points for Energy audits must adhere to the requirements for each unit assisted. The audit will include a blower door test, duct blaster test, Combustible Area Zone test (if applicable), and evaluation to determine the need for weatherization related improvements. Identified improvements that are economically and structurally feasible will be included in the work write up. The audit will also include testing and an evaluation after work is complete to determine the effectiveness of the improvements. Lead Hazard Reduction Based on the Lead-Based Paint Poisoning Prevention Act (42 U.S.C et al) and HUD implementing regulations at 24 CFR part 35, whenever housing built before 1978 is under consideration for CHIP funding, the local government, State Recipient or Non- Profit Subrecipient must follow HUD s regulation, Requirements for Notification, Evaluation and Hazards in Federally Owned Residential Property and Housing Receiving Federal Assistance. The regulations can be assessed at: Please note that changes to the Lead Safe Housing Rule effective April 22, 2010, incorporated one major change - renovation firms must be certified. At least one certified renovator must be on-site during phases of work and be available by phone during all other stages of the project and must be able to be on the job site within one hour at all times while renovations are being conducted. The certified renovator may be a certified Lead Based paint abatement supervisor who has completed the 4-hour Renovation, Repair and Painting Rule (RRP) refresher course. DCA requires all Recipients to provide updated certification information based on Georgia EPD requirements. Lead-Based Paint Hazards The U.S. Department of Housing and Urban Development has published a final rule entitled "Requirements for Notification, Evaluation and Reduction of Lead-based paint Hazards in Federally Owned Residential Property and Housing Receiving Federal Assistance." The regulation is being issued under sections 1012 and 1013 of the Residential Lead-Based Paint Hazard Reduction Act of 1992, which are part of Title X of the Housing and Community Development Act of Sections 1012 and 1013 of Title X amended the Lead-Based Paint Poisoning Prevention Act of The regulation appears within title 24 of the Code of Federal Regulations as part 35 (24 CFR 35). This COMMUNITY HOME INVESTMENT PROGRAM (CHIP) P a g e 10

11 rule, which updates and expands previous rules, directly effects federally assisted housing rehabilitation and home buyer programs. Whenever housing under consideration for CHIP funding was built before 1978, HUD s regulations on lead based paint must be followed. A state certified lead risk assessor must conduct the clearance testing and risk assessment. The evaluation must be discussed with the homeowner and all appropriate pamphlets, notifications, and reports on lead-based paint hazards should be shared for review. The homeowner must sign a lead based paint notification stating that they are aware of the possible hazards on the property. The cost of the lead hazard control work will be provided as a grant to the homeowner. Occupants will not be permitted to enter the worksite during hazard reduction activities. The dwelling unit and the worksite shall be secured against unauthorized entry, and the homeowner s belongings protected from contamination from dust-lead hazards and debris during hazard reduction activities. Occupant belongings in the containment area shall be relocated to a safe and secure area outside the containment area, or covered with an impermeable covering with all seams and edges taped or otherwise sealed. The worksite shall be prepared to prevent the release of leaded-dust, and contain leadbased paint chips and other debris from hazard reduction activities within the worksite until they can be safely removed. Rehabilitation of all housing constructed prior to 1978 is subject to these regulations (Subpart J) unless considered an exempt property as outlined below: A. Requirements Disclosure: 1. Written verification of the receipt of each of the following items must be in the case file: a. Distribution of the EPA Protect Your Family From Lead In Your Home pamphlet within sixty (60) days of rehabilitation activity. (It is a good idea to give out the pamphlet at the time of the application for assistance AND at contract signing) b. Disclosure of results of all testing and risk assessment c. Disclosure of all planned Lead hazard reduction activities d. Disclose results of all clearance examinations B. Lead Hazard Evaluation: 1. Conduct visual assessment, paint testing and/or risk assessment. 2. Presume the presence of Lead-Based Paint COMMUNITY HOME INVESTMENT PROGRAM (CHIP) P a g e 11

12 C. Lead Hazard Reduction: 1. Conduct Lead hazard reduction activities, including paint stabilization, interim controls, standard treatments, or abatement depending on the activity type. a. Only Qualified Safe Work Practice Trained Contractors may perform paint stabilization, interim controls or standard treatment activities. b. Only Georgia EPD Certified Abatement Contractors can perform abatement. 2. Conduct Clearance Examination to confirm that no lead-based paint hazards remain when work is complete. D. Exemptions NOTE: Elderly and disabled housing refer to units built for the EXCLUSIVE use by these populations. The terms do not mean any housing occupied at present by this population. In summary, the rule requires the following: 1. Prohibits the use of lead-based paint. 2. For properties constructed prior to 1978, applicants for rehabilitation assistance of property to be rehabilitated must be notified: a. that the property may contain lead-based paint; b. of the hazards of lead-based paint; COMMUNITY HOME INVESTMENT PROGRAM (CHIP) P a g e 12

13 c. of the symptoms and treatment of lead-based point poisoning; d. of the precautions to be taken to avoid lead-based paint poisoning; e. of the advisability and availability of blood lead level screening for children under seven years of age; and f. that in the event lead-based paint is found on the property, appropriate hazard control methods will be used to remove identified hazards. g. Copies of all reports (Inspection, work write-up, risk assessment, clearance) are provided to the owner. (Written evidence of receipt must be in the file.) h. That the housing unit must pass clearance prior to re-occupancy of the unit. 3. The State Recipient and Subrecipient must complete the "Watch Out For Lead Paint Poisoning" disclosure notice for all heads of households and owners of vacant units and retain a signed copy at which time a copy of the EPA pamphlet "Protect Your Family from Lead in Your Home" shall be distributed to the occupant of each unit constructed prior to 1978 within 60 days of the start of rehabilitation work. (Written evidence of receipt must be in the file). 4. For properties constructed prior to 1978, procedures are established to eliminate lead-based paint hazards. The elimination procedures, described below, include evaluation, testing and Hazard Control actions that must be implemented. C. Lead Hazard Control for Rehabilitation Programs The amount of federal assistance that will be provided in a unit is the key to determining the minimum level of Lead Hazard Control required. The amount used for this determination should include only the hard costs involved in the rehabilitation disregarding lead hazard reduction costs and soft costs (administration, relocation, environmental review, etc). The minimum required level of Hazard Control is broken down into three categories according to the amount of Federal assistance per unit. The following chart describes the three levels of activity: REHABILITATION - Subpart J Amount of Federal Assistance <$5,000 $5,000-$25,000 >$25,000 Approach to Lead Hazard Evaluation and Reduction DO NO HARM Identify and Control Lead Hazards Identify and Abate Lead Hazards Notification YES YES YES Lead Hazard Evaluation Paint Testing (on Surfaces to be Disturbed Only) Paint Testing and Risk Assessment Paint Testing and Risk Assessment COMMUNITY HOME INVESTMENT PROGRAM (CHIP) P a g e 13

14 Lead Hazard Reduction Repair Surfaces Disturbed During Rehabilitation Interim Controls Abatement (Interim controls on Exterior Surfaces not Disturbed by Rehabilitation) Options Clearance Requirement Presume Leadbased Paint & Use Safe Work Practices on All Surface Areas Clearance of Work Site Presume Lead-based Paint and/or Hazards & Use Standard Treatments Clearance of Unit Presume Leadbased Paint and/or Hazards & Abate all Applicable Surfaces Clearance of Unit Clearance Standards for Federally assisted projects: Floors Interior window sill (stool) Window trough Exterior Concrete Surfaces Soil* *Applies only to risk assessment 40µg/SF 250µg/SF 400µg/SF 800µg/SF 1200µg/SF - in child play area Level I: For units where the amount of Federal assistance provided will total up to (and including) $5,000, the painted surfaces that will be disturbed during rehabilitation need to be evaluated (tested for presence of lead-based paint) before rehabilitation activities begin. This must include all defective paint surfaces. If lead-based paint is discovered, the contractor must use safe work practices in the areas that lead-based paint is found. The contractor must provide documentation that they have attended and passed the HUD Safe Work Practices Training Course. Safe work practices include wet scraping, wetsanding, repair (painted components to be repaired should be thoroughly wetted prior to repair), HEPA vacuum sanding, HEPA vacuum needle gun, or covering defective surfaces with durable materials (wallboard or vinyl siding) with all joints sealed and caulked. Safe work practices are required on surfaces larger than 2 ft² in any one interior room or space and on exterior surfaces totaling more than 20 ft². If all painted surfaces to be disturbed (or in deteriorated condition) are going to be repaired, the assumption can be made that lead-based paint is present and testing can be skipped. Safe work practices must be used since presence of lead is assumed. Regardless of which approach is used, a clearance examination must be conducted (and passed) at the worksite(s) where lead-based paint is found or assumed. A clearance examination is defined as an activity conducted by a Georgia EPD Certified Lead-based Paint Inspector or Risk Assessor following lead-based paint hazard reduction activities to determine that no soil-lead hazard or settled dust-lead hazards exist in the dwelling unit or worksite (as applicable). Clearance must be performed by a "neutral" third party not otherwise COMMUNITY HOME INVESTMENT PROGRAM (CHIP) P a g e 14

15 involved in the actual hazard control work. In no cases can the contractor performing work in the unit in any capacity or any designee of the contractor perform the clearance examination. The clearance process includes a visual assessment and collection and analysis of environmental samples, and a report detailing hazard control methods used and sample information. Clearance is not required if rehabilitation did not disturb painted surfaces measuring total surface area parameters listed above. Level II: For units where the amount of Federal assistance provided falls between $5,000 and $25,000, the entire unit must be visually inspected for presence of deteriorated paint. Deteriorated paint and all coated surfaces that will be disturbed by rehabilitation activities must be tested for lead-based paint and, if present, a risk assessment must be completed. The rehab advisor may choose to have a lead-based paint inspection done, especially for a unit requiring extensive rehab. Generally, an inspection will be less costly than a risk assessment and if inspection results are negative, will preclude a risk assessment since no lead-based paint is present. If inspection reveals presence of lead-based paint a risk assessment is necessary. Provided that the person performing the inspection is a certified Risk Assessor, they may be instructed to complete a Risk Assessment while still at the property. Lead-based paint inspection is defined as a surface by surface investigation to determine the presence and location of lead-based paint on all painted, varnished or coated surfaces performed by a Georgia certified Lead Inspector and provision of a report detailing results of the investigation. Risk assessment is defined as an on-site investigation by a Georgia certified risk assessor to determine the existence, nature, severity, and location of lead-based paint hazards; and provision of a report by the firm or individual conducting the risk assessment detailing results of the investigation and options for reducing the lead-based paint hazards. Using the risk assessment report as a guide, the Rehab advisor must make a decision as to the implementation of the recommendations using cost, long-term benefits, effectiveness, and rehab goals as some of the factors. Interim control measures are allowed to reduce lead hazards in this category. Interim controls are defined as a set of measures designed to temporarily reduce human exposure or likely exposure to leadbased paint hazards. Interim controls include, but are not limited to, repairs, paint-film stabilization, temporary containment, specialized cleaning, clearance activities and operation of management and resident education programs. Generally speaking, interim controls will be less expensive than abatement (see level III below) and will provide more flexibility to the rehab advisor when completing the work write-up but cannot be used in all situations. If planned rehab activities include replacement of components that test positive for lead-based paint, such activity may be deemed abatement and the rules for abatement are triggered. Similarly, some interim controls cannot be used on defective substrate materials such as rotted wood or damaged drywall. In these instances, the cause of the damage should be corrected then the damaged component should be replaced. COMMUNITY HOME INVESTMENT PROGRAM (CHIP) P a g e 15

16 On April 19, 2001 EPA and HUD issued a joint notice that basically states that only activity intended as abatement shall be covered by the strict abatement guidelines. Intent is defined as when abatement is specified in work specifications, job write-ups, cost allocation or similar documents or when abatement is specifically ordered by responsible state or local agency or court order. However, Georgia EPD is the agency responsible for regulating lead-based paint activity. Georgia EPD has indicated that any work that can be deemed an abatement technique (e.g., component removal regardless of intent) must be performed by a certified lead contractor. In all cases where interim controls are used, the contractor MUST utilize safe work practices. The contractor must provide documentation of a Notice of Completion of the HUD approved one day safe work practices training course. Only a certified abatement contractor can perform abatement activity. The rehab advisor may use a combination of abatement and interim controls to eliminate the lead hazards in the property. Clearance of the entire unit must be achieved after work is completed. The contract language should contain a clause making the contractor responsible for costs associated with failure to pass clearance (i.e.: re-cleaning, additional testing, additional relocation etc.). Level III: For average per unit cost above $25,000 abatement of all lead hazards is required. Abatement is defined as a set of measures designed to permanently eliminate lead-based paint or lead-based paint hazards. (Permanent means an expected design life of at least 20 years.) Abatement includes: (1) The removal of lead-based paint and dust-lead hazards, the permanent enclosure or encapsulation of lead-based paint, the replacement of components or fixtures painted with lead-based paint, and the removal or permanent covering of soil-lead hazards; and (2) all preparation, cleanup, disposal, and post abatement clearance testing activities associated with such measures. Abatement activities can only be performed by Georgia certified lead firms and individuals. Only Georgia certified lead contractors may perform abatement work. All abatement work is governed by rules and regulations promulgated by the Georgia Department of Natural Resources, Environmental Protection Division. EPD requires notification of all abatement work and issues fee based permits for abatement work. Abatement activities can be subcontracted to a certified contractor for completion of the lead abatement activities. All contractors working on rehabilitation of housing units associated with a CHIP-funded project are to attend HUD approved Safe Work Practices training (This training is MANDATORY for contractors hired to perform interim controls). Contractors interested in becoming Certified Lead Abatement firms must attend EPA certified training and pass a Georgia EPD certification exam. Hazard Control without testing: The grantee may forego testing and control all interior and exterior surfaces covered by the rule in accordance with the methods described above. Under this assumption, all coated surfaces are assumed to have lead-based paint and all surfaces must be treated accordingly. A risk assessment is required prior COMMUNITY HOME INVESTMENT PROGRAM (CHIP) P a g e 16

17 to rehabilitation activities in all units receiving over $5000 in Federal assistance (Levels II and III) even if lead-based paint is presumed (24 CFR part ). Presumption of lead-based paint in units receiving under $5,000 in Federal assistance requires that all defective paint and all coated surfaces to be disturbed are assumed lead-based paint, and approved hazard control methods must be utilized and clearance passed. Exemptions: De Minimus Levels. Safe work practices are not required when maintenance or hazard reduction activities do not disturb painted surfaces that total no more than: (1) 20 square feet (2 square meters) on exterior surfaces; (2) 2 square feet (0.2 square meters) in any one interior room or space; or (3) 10 percent of the total surface area on an interior or exterior type of component with a small surface area. (Examples included window sills, baseboards and trim). These lead-based paint regulations require all State Recipients and Sub-recipients utilize certain housing rehabilitation forms and procedures: 1. A "Watch Out for Lead-Based Paint" disclosure receipt form must be completed. It or an equivalent notice with the required disclosure must be completed for every owner (where applicable) of a pre-1978 unit. 2. A copy of the EPA pamphlet "Protect Your Family from Lead in Your Home" shall be distributed to the occupant of each unit constructed prior to The Watch Out for Lead-Based Paint disclosure receipt will serve as the signed acknowledgement of receipt of the pamphlet. 3. Applications for Rehabilitation Assistance should contain certifications from the homeowner that: a. They received a copy of the "Watch Out for Lead-Based Paint" form and a copy of the EPA pamphlet "Protect Your Family from Lead in Your Home", and b. The unit will or will not be occupied by a child under seven years of age, a pregnant woman, or an EBL child. 4. Work write-up should indicate whether the unit: (a) has been built prior to 1978; (b) that a lead-based paint inspection and risk assessment has been performed; (c) whether hazard control measures are required and are included. If hazard control procedures are required, the write-up must reflect what method will be used. 5. The Certificate of Final Inspection must show that the property conforms to the Federal and State Lead-Based Paint Regulations and Policies. 6. Bid Document Specifications must require that the Contractor has completed a HUD approved safe work practices training course. 7. Minimum Property Standards must include the following verbatim: COMMUNITY HOME INVESTMENT PROGRAM (CHIP) P a g e 17

18 "Inspection and Testing: A State Recipient and Subrecipient is required to perform leadbased paint inspection and risk assessment in all units constructed prior to Elimination of lead-based paint hazards by recognized hazard control methods shall be included in the work write-up. If testing reveals presence of lead-based paint hazards, elimination those hazards will be a part of the work write-up and bid document specifications. Testing is required for all units constructed prior to Compliance Standards: 1. Testing of paint surfaces and Hazard Control activities to eliminate the hazard of lead-base paint poisoning shall be in compliance with HUD lead-base paint regulations (24 CFR, Parts 35 and 570). 2. The dwelling unit shall be in compliance with HUD Lead-Based Paint regulations, 24 CFR, Part 35 and 570 (Subpart "J") issued pursuant to the Lead-Based Paint Poisoning Prevention Act. Also, the State Recipient and Subrecipient shall provide a certification that the dwelling is in accordance with such HUD Regulations and the Georgia Department of Community Affairs Policies and Procedures on Lead-Based Paint Poisoning and Prevention. 3. If the property was constructed prior to 1978, the Family upon occupancy shall have been furnished the notice required by HUD Lead-Based Paint regulations and procedures regarding the hazards of lead-based paint poisoning, the symptoms and treatment of lead poisoning and the precautions to be taken against lead poisoning. D. Testing Testing must be performed by a Georgia EPD Certified Inspector or Risk Assessor: 1. Method. Lead concentrations must be determined either (1) on-site using a portable X-ray fluorescence (XRF) analyzer or (2) by taking paint samples and having them analyzed in a laboratory. 2. Standards. Test readings of 1.0 milligrams per square centimeter (mg/cm2) or greater, using an XRF, shall be considered positive for presence of lead-based paint. This standard can be used with laboratory analysis, if it is possible to take a paint sample of known area. If not, the standard for presence of lead-based paint shall be a level equal to or greater than 0.5 percent by weight (equal to 5,000 parts per million). 3. Paint samples. Paint samples for laboratory analysis must include all layers of paint down to the substrate material (e.g., plaster or wood). If the paint sample is not of known area, it must not include any substrate material. Inclusion of substrate material dilutes the lead concentration of the sample. This method of COMMUNITY HOME INVESTMENT PROGRAM (CHIP) P a g e 18

19 testing is destructive and is not recommended (in most cases) as the primary means of performing a lead-based paint inspection. 4. Qualifications of testers and laboratories. An inspector or risk assessor certified by the State of Georgia Environmental Protection Division must conduct testing. Documentation of current certification is required. The U.S. Environmental Protection Agency (NLLAP) must accredit all laboratories used for analysis by the inspector, for analysis of heavy metals. E. Occupant Protection The dwelling unit occupants and environment must be protected from contamination from lead-containing materials during hazard reduction activities. 1. Occupants shall not be permitted to enter worksite during hazard reduction activities and not permitted to re-occupy until all hazard control work has been completed and clearance has been achieved. 2. Occupants shall be temporarily relocated before and during hazard control activities. (Certain exemptions to this requirement may apply. Contact DCA for guidance on this subject.) 3. The dwelling unit and the worksite shall be secured against unauthorized entry, and occupant belongings protected from contamination from dust-lead hazards and debris during hazard reduction activities. 4. Occupant belongings in the containment area shall be relocated to a safe and secure area outside the containment area, or covered with an impermeable covering with all seams and edges taped or otherwise sealed. 5. The worksite shall be prepared to prevent the release of leaded-dust, and contain lead-based paint chips and other debris from hazard reduction activities within the worksite until they can be safely removed. 6. Warning signs shall be posted in accordance with 24 CFR Part 35 Section (b)(2). F. Clearance All lead hazard control activity MUST pass clearance. Clearance is defined as an activity conducted following lead-based paint hazard reduction activities to determine that the hazard reduction activities are complete and that no soil-lead hazards or settled dust-lead hazards exist in the unit (or, if Federal Assistance is less than $5,000, worksite only). In all cases, the clearance examination must be performed by a Georgia EPD certified inspector or risk assessor. In most cases this will be the same personnel that conducted the risk assessment. While this is not mandatory, the clearance examination MUST be performed by a certified individual who is a neutral third party that has no relationship with the contractor who performed the hazard control activity. In NO case should the contractor or their designee perform the examination. The lead hazard control contract should have provisions that make the contractor responsible for any costs associated with failure to pass clearance (additional cleaning, continued relocation, additional testing, etc.). COMMUNITY HOME INVESTMENT PROGRAM (CHIP) P a g e 19

20 The rehabilitation advisor should keep in mind that for Level II and III activity, the ENTIRE unit must pass clearance, even if work was not performed in the entire unit. This means that write-ups for these units must include the specification of specialized cleaning in preparation for clearance testing that must be performed for the entire unit, including any outbuildings or other appurtenances. NOTE: The Inspection/Risk Assessment Reports along with the Lead AND General Work Write Ups must be submitted to DCA PRIOR to soliciting bids from contractors. After Rehabilitation Value HUD has issued new HOME Property Value Limits ("95% limits") for 2013 that are effective August 23, In 24 CFR (a)(2)(iii) of the HOME Final Rule published on July 24, 2013, HUD established new property value limits for homeownership activities. These new limits apply to all homeownership housing to which HOME funds are committed on or after August 23, 2013, and will remain in effect until HUD issues new limits (a)(2)(iii) is revised so that PJs are no longer permitted to use the FHA Single Family Mortgage Limit [known as the 203(b) limit] as a surrogate for 95 percent of area median purchase price, as was permitted in the pre-2013 Rule. This change was necessitated by statutory changes to the 203(b) statute, which, over time, increased the FHA Section 203(b) floor. With these increases, the 203(b) limits became a less reliable surrogate for 95 percent of area median purchase price. The HOME program statute requires that no housing have a purchase price or afterrehabilitation value that exceeds 95 percent of area median purchase price, in order to ensure that HOME-assisted housing is modest and non-luxury. In the 2013 Rule, (a)(2)(iii) is amended to eliminate the use of 203(b) limit and to change the methods for determining 95 percent of area median purchase price. HUD will determine and issue limits that represent 95 percent of the area median purchase price separately for newly constructed and existing single family housing units. The new HOME Rule requires the State to evaluate the property value of a unit assisted based on whether the unit is considered "existing" or "new construction". For Homeowner Rehabilitation Assistance Activities, the new construction property value should only be used in cases where the unit will be reconstructed. For all other activities associated Homeowner Rehabilitation, the property value limits for Existing Homes should be followed. The most current HOME Property Value Limits can be found either on DCA s website or COMMUNITY HOME INVESTMENT PROGRAM (CHIP) P a g e 20

21 HUD s website at: ehousing/programs/home/limits/maxprice OTHER FEDERAL REQUIREMENTS Environmental Clearance A complete and clear project description is the first step in the environmental review process. The project description should provide location specific information and geographic boundaries, as well as a delineation of all activities included in the overall scope of the project. Tier One Environmental Review State Recipients Under HUD requirements, State Recipients are permitted to complete the Environmental Review process as the Responsible Entity. The Environmental Review process, including DCA approval, must be concluded within sixty (60) days of the effective date of the CHIP Agreement with GHFA. Also, the Environmental Review process must be completed and submitted to DCA within forty-five days (45) days after entering into the CHIP Agreement with GHFA. DCA will review and provide notice back to the State Recipient within fifteen (15) days of submission in order to complete this sixty day process. Subrecipients Under HUD requirements, Subrecipients are not permitted to complete Tier One of the Environmental Review process. DCA will complete its role in Tier One process scope of work on behalf of the Subrecipient within forty-five (45) days of the effective date of the CHIP Agreement with GHFA. DCA will be required to submit its determination to HUD for approval. In general, as guidance only, the HUD approval process takes fifteen (15) days to complete. Tier Two Environmental Review State Recipients Once State Recipients, as Responsible Entities, have completed the Tier One process, an individual project site has been identified, and prior to beginning any work that will have a physical impact on any property proposed to be served, the State Recipient must complete the pre-set process which includes the submittal of an Owner Occupied Rehabilitation or Reconstruction New Construction Site Specific Environmental Screening Checklist which reviews each of the items on the Statutory Checklist for applicability to the specific property proposed. Any items that are triggered by regulations listed on the Screening Checklist must be addressed in accordance with the appropriate statute. For example, if the property is fifty (50) years of age or older, any activity must be reviewed for its possible effect under the National Historic Preservation Act. The State Recipient must submit to DCA the Screening Checklist along with all documentation to show how the federal regulation was cleared. Upon review and approval of these items, DCA will then issue a notice to proceed for the project. During this period as DCA and HUD are completing the Environmental Review process, the State Recipient may initiate activities that have no physical impact on the property proposed to be served. Should any physical impact occur prior to completion of the Tier Two Review (i.e. DCA s COMMUNITY HOME INVESTMENT PROGRAM (CHIP) P a g e 21